“Only the little people pay taxes,” said a New York celebrity real estate figure in the 1980s. It was not Donald Trump but Leona Helmsley, who was eventually convicted of tax fraud and served time in prison. But they had a lot in common.
Tuesday night, the New York Times published a blockbuster story on President Trump’s finances based on documents never made public before, including tax returns from his father, Fred Trump. The revelations are staggering.
They demonstrate that not only has Trump been lying for years about the enormous amount of money he was given by his father, but Fred Trump, Donald Trump and Donald’s siblings were engaged in what amounted to a yearslong conspiracy to commit tax fraud:
“He and his siblings set up a sham corporation to disguise millions of dollars in gifts from their parents, records and interviews show. Records indicate that Mr. Trump helped his father take improper tax deductions worth millions more. He also helped formulate a strategy to undervalue his parents’ real estate holdings by hundreds of millions of dollars on tax returns, sharply reducing the tax bill when those properties were transferred to him and his siblings.”
The Times story details a variety of schemes the Trumps used to avoid income taxes, gift taxes and, most critically, estate taxes.
The newly revealed documents show that Donald Trump’s claim that he built his company all on his own is a lie. “It has not been easy for me,” Trump said during the 2016 campaign. “My father gave me a small loan of a million dollars, I came into Manhattan, and I had to pay him back, I had to pay him back with interest.” While we’ve long known this claim was false, the Times shows that in fact, Fred Trump gave Donald vast sums over the years in gifts, “loans” that charged no interest and that he was never expected to pay back, and other vehicles that amounted to the equivalent of $413 million in today’s money.
‘Beyond the pale’
That’s just one part of an extremely complex story, but it’s important to note that the Times, in an article that was surely vetted carefully by its attorneys, describes what the Trumps did as “outright fraud.”
I spoke Wednesday morning to Daniel Shaviro, a professor at the New York University law school and an expert in tax law, and asked him whether this kind of thing isn’t unusual among the super-rich. If we were to investigate a bunch of billionaire families, would we find that they’re up to similar machinations?
Shaviro said the answer is no, and described the schemes in the Times article as “beyond the pale.” The estate tax in particular, he said, is rife with opportunities for planning to avoid tax liability. If you’re a billionaire, there are plenty of legal ways to minimize your tax bill.
For some time, I have been arguing that Donald Trump is not merely someone who skirts the rules or skates close to the line, but in fact may be the single most corrupt major business figure in America. Here’s how I summarized it in April:
“He ran scams like Trump University to con struggling people out of their money. He lent his name to pyramid schemes. He bankrupted casinos and still somehow made millions while others were left holding the bag. He refused to pay vendors. He exploited foreign workers. He used illegal labor. He discriminated against African-American renters. He violated Federal Trade Commission rules on stock purchases. He did business with the mob and with Eastern European kleptocrats. His properties became the go-to vehicle for Russian oligarchs and mobsters to launder their money.”
Just imagine for a moment if a story like this one — detailing years of tax fraud — came out about Hillary Clinton. The Republicans who mounted seven separate congressional investigations of Benghazi would be making it rain subpoenas. What are they planning to do about evidence that Trump has committed tax fraud — and the very real possibility that he still is? Not a thing.
But as Shaviro pointed out to me, for all the detailed information in the Times article, there are still places other kinds of fraud could have been committed. Something tells me there might be some interesting things yet to learn.
Paul Waldman is an opinion writer for The Washington Post’s Plum Line blog.
